Big bank goes all-in on business lending expansion push
Westpac is accelerating its tilt towards business lending, unveiling a multi-year strategy that couples aggressive banker hiring with digital investment, while insisting growth will not come at the expense of credit discipline.
The bank’s business and wealth division, led by Paul Fowler, now contributes nearly a third of group profit and is being positioned as a cornerstone for future earnings. In its September update, Westpac emphasised momentum across deposits, transaction accounts and lending, underpinned by plans to bring in an additional 350 bankers by 2027.
So far in 2025, 135 bankers have been added, with Westpac confirming the creation of new business banking centres and an expanded regional footprint. The push is intended to reclaim ground lost over the past decade, when National Australia Bank dominated the sector and Commonwealth Bank strengthened its “main bank” strategy.
Complementing the hiring drive is BizEdge, a new digital origination platform designed to halve banker processing time and speed up simple loan decisions to within a day.
Automation has already cut processing times by 10% since May, while invoice and equipment finance applications are now being settled in hours rather than days.
Westpac’s latest figures show annual business lending up 15% to $112.5 billion, running 1.5 times above system growth. Agriculture, health and professional services have been stand-out sectors, each delivering growth above 20%. Deposits also rose 5% year-on-year, with transaction balances making up the bulk of that increase.
Regional lending was a particular bright spot, rising 32% to $22 billion over the past year. Fowler pointed to opportunities in first-party lending and deepening customer relationships, noting that 87% of regional clients already hold transaction accounts with the bank.
The business and wealth division posted a return on tangible equity of 19% in the first half of 2025, comfortably above the group’s average. The update stressed that “margin discipline” is being maintained, with risk-adjusted net interest margins largely stable despite competitive pressure.
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While credit growth is running hot, stressed exposures remain contained at 0.54% of total committed exposures. Victoria and the transport sector were highlighted as the main areas of stress, but overall impairment levels are trending lower. Over three-quarters of simple deals are now auto-decisioned, allowing faster turnaround while maintaining credit oversight.
For mortgage brokers, the sharpened focus on business banking is notable for two reasons. First, it signals Westpac’s intent to cross-sell home loans to its expanding base of SME and commercial clients, leveraging what it calls “whole-bank” relationships. Second, as pricing competition intensifies in business banking, it may parallel the mortgage sector’s experience of margin compression during the home-loan “wars”.
Fowler insists Westpac’s playbook is about more than rate cuts. “Deeper relationships with our customers also make for more profitable relationships,” he said at the update. He highlighted opportunities in working capital lending, foreign exchange and transaction banking as cross-sell opportunities to small business owners.
The bigger picture
The renewed emphasis on business banking comes amid a broader cultural shift at Westpac under chief executive Anthony Miller (pictured), a former Goldman Sachs banker who has signalled a more hard-driving internal culture. Together, the leadership team is betting that investment in bankers and technology will translate into sustainable gains in market share.
Westpac currently sits third in business lending with a 16.1% share, behind NAB at 21.6% and CBA at 18.85%. The ambition, Fowler told investors, is simple: “We serve one in five businesses today. I would love that to be one in four, in due course. We want more Australian businesses to call us their main bank.”
